A HOT NEW BOMBSHELL HAS ENTERED THE VILLA

Spring just took a nap.

Speaking of irrational markets, spring in the Bay Area was supposed to be hot. It wasn’t. Rates stayed rude, economic uncertainty loomed, and sellers clung to fantasy pricing. Buyers weren’t exactly rushing either (insurance, renovation costs, existential dread — pick one).

Meanwhile, the luxury crowd was living in their own reality. $3M+ homes were gone in a blink, with multiple offers and way over asking — the highest quarterly sales in three years. And international investors are back buying U.S. real estate, because apparently our economic panic is their shopping spree.

But! July brought a tiny flicker of hope: stocks are up, confidence is up, mortgage rates… ok fine, they barely moved but we’ll take it. If that continues, the second half of the year might actually feel… alive?

For now, sellers need to price realistically, invest in prep, and stage like you’re auditioning for Love Island (had to go full circle). Buyers: stop chasing the obvious 10s. The real steals are the “meh” ones everyone scrolls past.

(Still talking about houses. Not dating advice. Although… same rules may apply.)

Can you pass the SALT?

As part of the “Big Beautiful Bill” (or ugly depending on who you ask), the SALT deduction cap jumped from $10k to $40k, starting in 2025 through 2029.

SALT = State And Local Taxes, not to be confused with the stuff on your fries. In the Bay Area, where a “starter home” means a $12k+ property tax bill, this is kind of a big deal.

You can also keep writing off mortgage interest (up to the first $750k of debt) and deduct mortgage insurance premiums again. One catch: the $40k limit only applies if your taxable income is under $500k, joint filers included.

Of course, no tax break is actually free. These savings are coming out of Medicaid, food assistance, child care, and climate programs. High earners could pocket ~$12k while low-income families lose ~$1.6k a year.

Still, for Bay Area homeowners, this might finally be the year itemizing pays off. Call your CPA. Tell them I said you’re welcome.

Can he actually do that???

The Fed is dropping a casual $2.5 billion on fancy elevators and rooftop beehives while Trump yells at Powell to cut interest rates. Welcome to 2025.

Three things can be true at once: The Fed should probably cut rates soon. Their $2.5B HQ renovation is… a lot. And Trump throwing a tantrum about all of this is exactly why central banks are supposed to be independent.

The Fed’s job is to not play politics. Trump’s argument to “cut rates so the government can borrow cheaper!” is the perfect reminder why. A three-point cut right now would overheat the economy at a time when unemployment is low, inflation is stubborn, and tariffs are about to push prices higher.

But… the Fed isn’t so perfect either. Rates are still slowing growth, inflation’s been crawling toward 2% for years, and job numbers looks shaky. A careful, gradual cut would make sense — just not for Trump’s reasons.

Now for the real drama: Trump has threatened to fire Powell early. Technically, it’s illegal to fire a Fed chair over policy disagreements. But there’s a “for cause” loophole, and Trump’s team now claims Powell “mismanaged” that $2.5B renovation.

Would it hold up in court? Who knows. But if he tried, it would land in the Supreme Court. Then the fight would be more about whether the Fed’s independence is actually as bulletproof as we like to think. Because the only thing scarier than a Trump tantrum is a Fed that actually gives in.